T-Mobile iPhone goes from myth to reality: $580, but no contract

"This is an important day for people who love their iPhone," says T-Mobile CEO.

The T-Mobile iPhone is real, and it will be available to subscribers starting on April 12. The company announced on Tuesday that qualifying customers would be able to buy the iPhone 5 for "$99.99 down, plus monthly payments" that are added to their monthly subscription fees. At $20 per month for 24 months, this brings the total cost of a 16GB iPhone 5 to its pre-subsidized price of just below $600—a far cry above what someone might pay for a subsidized device through AT&T, Verizon, or Sprint. On the upside, T-Mobile touted its lack of two-year contract (or any contract at all), which gives subscribers the freedom to leave the carrier at any time without penalty. (Of course, one could argue that being on the hook for 24 months of payments on a phone is akin to a contract.)

The iPhone 5 is not the only Apple device being sold through T-Mobile. The carrier also announced that it would offer the iPhone 4S and iPhone 4, though those devices will only be available in select markets. Like the iPhone 5, those buying an iPhone 4S through T-Mobile will be required to put down $69.99 up front (iPhone 4 will be $14.99 up front), with another 24 months of $20 payments.

"This is an important day for people who love their iPhone but can’t stand the pain other carriers put them through to own one," T-Mobile USA CEO John Legere said in a statement. "We feel their pain. I’ve felt the pain. So we’re rewriting the rules of wireless to provide a radically simple, affordable iPhone 5 experience—on an extremely powerful network."

The iPhone 5 will function on T-Mobile's 4G/LTE networks where it's available (T-Mobile also announced on Tuesday it was launching LTE in Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose, and Washington DC). The iPhone 4S and iPhone 4 will obviously not work on LTE, but they will function on T-Mobile's "4G" HSPA+ network.

I looked at the new non contract plans. For a 5 phone plan, it costs me 248+. For 5 person, non contract, unlimited talk, text, and unlimited 4g, it is 210. Currently on my five phone plan, only one phone has unlimited 4G. If I keep all of the data tiers as they are with 4 2GB caps and 1 unlimited 4g, It will only cost me 175. Time to make the switch to non contract for sure!

How does paying for the phone work if you leave? Do you owe the rest then? Do you just keep paying on the phone? Do you have to return the phone?

I guess this is a question for T-Mobile's services now as a whole.

I understand that you can continue paying on it monthly till it is over, or pay the remainder of the balance, or return the phone (in which you do not receive any refund for what you have already paid).

This is the beginning of the end of bundling, which totally distorts the device and wireless service industry. The true cost of phones will be more apparent to customers, and maybe they won't upgrade as often as they do now. A more viable used market will appear, and the other carriers will eventually be forced to offer similar plans.

You know, unless you actually factor in the subsidy. Since the whole point of the new T-Mobile plans is to take that out of the monthly plan, not mentioning this - and actually sticking to the standard telco line - isn't telling the whole story, and it's the exact type of salient detail I'd expect Ars to focus on.

Aside from keeping the phone charges separate (so you know what they are), this also means those charges disappear after you've finished paying for the device. Show of hands for people who had AT&T, Verizon, or Sprint give them discounted plans to remove the subsidy charges once they'd finished their two-year contract.

How does paying for the phone work if you leave? Do you owe the rest then? Do you just keep paying on the phone? Do you have to return the phone?

I guess this is a question for T-Mobile's services now as a whole.

It's just like buying a phone from another store, and then getting service from T-Mo. You own the phone and have to keep paying for it, even if you don't want their service. However, you can sell the phone and get back most or all of what you owe on it. It's just like landline phone service now, you buy your own phones and then get service from VZ or whoever.

This is the beginning of the end of bundling, which totally distorts the device and wireless service industry. The true cost of phones will be more apparent to customers, and maybe they won't upgrade as often as they do now. A more viable used market will appear, and the other carriers will eventually be forced to offer similar plans.

This heads us into the direction that is akin to the European cellular market where carriers sell devices unlocked and unsubsidized as an aside to them actually offering cellular service.

It's going to be a rude awakening for some people, but they will hopefully understand arithmetic and see that they had been cheated by subsidized plans.

This is good for me, because I am an avid purchaser of new electronics, I buy the new product and sell my old one or give it to a family member. It's not the model that 90% of people follow I am sure, but this benefits me so now I do not have to worry about being tied to a plan for a device i bought 3 iterations ago.

I think $349 for a 16gb Nexus 4 is a better deal. I got that and currently on the $30/month T-mobile prepaid for 100 minutes and unlimited text and data (HSPA+ throttled after 5gb). However, I may switch to a bundled plan later on when all of my family is off of VZW.

4 words. We love you t-mobile. If free markets ever return to the US, it will be because of organizations like T-mobile. Stepping up to re-start American competition by eliminating contracts - contracts that eliminate competition, T-mobile is demonstrating not only great ethical behavior but American leadership, a refreshing breeze in an economy mostly gamed by GOP politicians, right-wing extremist monopolies and super-centralized capital manipulators. All of whom showed their colors in 2000-2007, by collapsing the world economy, the massively profiting during the 2008-2012 recovery, returning nothing to the common wealth of Americans.

But having said that, :-) T-mobile you rock, I'm dumping my contract and switching and never signing another g'darn contract with a telcom provider.What else can I do to demonstrate that I support t-mobiles' move? Patronize their store? will do. Vote for a progressive candidate that support telcom competition, will do. Write the Whitehouse about who runs the FCC next, *will do*. Let's get the American economy working for the vast majority again. w00t.

I think $349 for a 16gb Nexus 4 is a better deal. I got that and currently on the $30/month T-mobile prepaid for 100 minutes and unlimited text and data (HSPA+ throttled after 5gb). However, I may switch to a bundled plan later on when all of my family is off of VZW.

The Nexus 4 is without a doubt the best smart phone deal you can get. An unsubsidized phone for 350 dollars is half what you pay for roughly equivalent offerings from Samsung, Apple, HTC, etc. Even though it lacks LTE, HSPA serves up very good speeds and I don't think LTE is worth another 300 or 350 dollars.

It's completely disingenuous to say that the final price of the device is a 'far cry from what someone might pay' for a subsidized device. Comparing actual prices to subsidized is apples to oranges. Besides the fact you are paying for the subsidized device in higher service prices. Not to mention that a subsidized contract won't change after the contract period is up, where T-Mobile's will change once the device is paid for. his is how it should be done, and to make any comparison to these new plans and subsidy plans is impossible until the other carriers disclose exactly what portion of the plans go towards subsidies (which they never will, because it won't add up).

True, but only when you buy the iPhone 5 through T-Mobile. They will likely have to re-certify the phone through the FCC to get the AWS WCDMA/UMTS approval. AT&T put in its RFPs that phones it sells must have Band 4 (AWS) WCDMA/UMTS disabled in firmware (how convenient, then it wont work on T-Mobile).

You wont be able to take a current AT&T iPhone 5 and move to T-Mobile's network.

It's completely disingenuous to say that the final price of the device is a 'far cry from what someone might pay' for a subsidized device. Comparing actual prices to subsidized is apples to oranges. Besides the fact you are paying for the subsidized device in higher service prices. Not to mention that a subsidized contract won't change after the contract period is up, where T-Mobile's will change once the device is paid for. his is how it should be done, and to make any comparison to these new plans and subsidy plans is impossible until the other carriers disclose exactly what portion of the plans go towards subsidies (which they never will, because it won't add up).

This is the first step toward getting carriers to itemize this in their contracts, and once they do that there can be actual competition on it instead of hand wavy B.S. excuses for inflated prices.

I really hope T-Mobile is successful enough with this to scare other carriers into doing it.

This is the beginning of the end of bundling, which totally distorts the device and wireless service industry. The true cost of phones will be more apparent to customers, and maybe they won't upgrade as often as they do now. A more viable used market will appear, and the other carriers will eventually be forced to offer similar plans.

I doubt so. Phone manufactures/carries are taking every step they can (non-removable batteries and memory, blocking software upgrades, etc.) to make sure that you will need a new phone as soon as possible.Even if you're off-contract, you will still need a new phone in two years (maybe sooner) because of these artificial limitations. Planned obsolecence at its finest.

True, but only when you buy the iPhone 5 through T-Mobile. They will likely have to re-certify the phone through the FCC to get the AWS WCDMA/UMTS approval. AT&T put in its RFPs that phones it sells must have Band 4 (AWS) WCDMA/UMTS disabled in firmware (how convenient, then it wont work on T-Mobile).

You wont be able to take a current AT&T iPhone 5 and move to T-Mobile's network.

Silly question, but there is no way to blast the firmware and re-enable to work on T-Mobile?

I just haven't had time to keep up with all the news, but are we definitely saying we can't unlock a AT&T iphone 4/4S/5 and use it on T-Mobile at all??

This is awesome. For the past year or two, TMO's already given me reduced rates in lieu of a subsidized phone. Now they're just advertising it. I've always enjoyed cutting past the bs and being able to see what I'm truly being charged for. Sure, I paid full price for my phone, but I've enjoyed low rates because of it, not to mention full freedom to use older phones, different phones, whatever I choose. No contracts. No bs.

What most people do with their cell phones is not any different than getting into debt. I treat it that way. If I can't afford a new phone now, then I can't afford it now. I'll just have to save up for it. No biggie. I don't feel like paying my phone off over the course of a two year contract. I love the freedom of switching plans as I see fit. TMO allows me this freedom.

...It's going to be a rude awakening for some people, but they will hopefully understand arithmetic and see that they had been cheated by subsidized plans...

People will be able to more clearly see the difference, but I'm not sure that prices will go down just because the game is changing.

Carriers like to nickel and dime customers for every service they offer. When the subsidized plans go away, we will see increases in fees on the other services.

I fear this is what will happen with T-Mobile forcing the other carriers hands. They all had plans for growth and their budgets are expecting to be bloated with people paying on subsidized plans. They will not want to have their plans disrupted by lowering their income. So they will find other ways to get the same amount of profit from each customer as they currently make.

Data caps may be lowered or the price for the amount of data may go up.

Voice plans may come with less minutes.

Text Messaging plans may become limited.

T-Mobile needs customers and this is a great way to appeal to both Subsidized customers as well as people who typically would use a prepaid phone carrier. It's not guaranteed that other carriers will follow suit. If the other carriers do decide to get rid of or make less use of subsidized plans, then are we going to see them making up for those lost profits in other areas? I hope not, but it's hard to see a future were customers actually get to pay less. I'll remain cautiously optimistic regarding the affects of T-mobiles new plans on the cellular industry.

Total noob iPhone/TMobile question (I'm currently using a 6year old flip phone from Virgin):

I need an iPhone for the mobile data + calling from home. Can the iPhone automatically use my home wireless network to make calls through TMobile (as opposed to some IPTelephony)?

Basically, I need unlimited minutes from home (possibly on local wireless) + very limited mobile calling (100 minutes) + data roaming. I know there are other options such as Google Voice, but I want a single device and contract to manage.

Total noob iPhone/TMobile question (I'm currently using a 6year old flip phone from Virgin):

I need an iPhone for the mobile data + calling from home. Can the iPhone automatically use my home wireless network to make calls through TMobile (as opposed to some IPTelephony)?

Basically, I need unlimited minutes from home (possibly on local wireless) + very limited mobile calling (100 minutes) + data roaming. I know there are other options such as Google Voice, but I want a single device and contract to manage.

...It's going to be a rude awakening for some people, but they will hopefully understand arithmetic and see that they had been cheated by subsidized plans...

People will be able to more clearly see the difference, but I'm not sure that prices will go down just because the game is changing.

Carriers like to nickel and dime customers for every service they offer. When the subsidized plans go away, we will see increases in fees on the other services.

I fear this is what will happen with T-Mobile forcing the other carriers hands. They all had plans for growth and their budgets are expecting to be bloated with people paying on subsidized plans. They will not want to have their plans disrupted by lowering their income. So they will find other ways to get the same amount of profit from each customer as they currently make.

Data caps may be lowered or the price for the amount of data may go up.

Voice plans may come with less minutes.

Text Messaging plans may become limited.

T-Mobile needs customers and this is a great way to appeal to both Subsidized customers as well as people who typically would use a prepaid phone carrier. It's not guaranteed that other carriers will follow suit. If the other carriers do decide to get rid of or make less use of subsidized plans, then are we going to see them making up for those lost profits in other areas? I hope not, but it's hard to see a future were customers actually get to pay less. I'll remain cautiously optimistic regarding the affects of T-mobiles new plans on the cellular industry.

Well I had just made the switch. My plan that I am currently on does not expire till March of 2014. I was charged an ETF fee for terminating my contract, 50$ per line. 250$. With my monthly plan being 248$ This will be added to my bill for June. After June I will be paying 178$ for Unlimited Talk, Text, and different tiered data plans across all 5 lines.

Basically By September I will see the discount I would have otherwise had to wait till March to see. 178 for five lines, unlimited talk, unlimited text, two lines with unlimited data, and three lines with 2gb cap data. (178 is my cost after tax)

True, but only when you buy the iPhone 5 through T-Mobile. They will likely have to re-certify the phone through the FCC to get the AWS WCDMA/UMTS approval. AT&T put in its RFPs that phones it sells must have Band 4 (AWS) WCDMA/UMTS disabled in firmware (how convenient, then it wont work on T-Mobile).

You wont be able to take a current AT&T iPhone 5 and move to T-Mobile's network.

Silly question, but there is no way to blast the firmware and re-enable to work on T-Mobile?

I just haven't had time to keep up with all the news, but are we definitely saying we can't unlock a AT&T iphone 4/4S/5 and use it on T-Mobile at all??

Nope, no way to alter the firmware to enable that band. That phone hasn't been certified by the FCC for transmission in the AWS band for 3G WCDMA/UMTS communications.

You could unlock an iPhone 4/4S/5 from AT&T and use it on T-Mobile with one major catch - you will only get fast 3G data speeds in areas where T-Mo has refarmed its PCS spectrum to 3G. I think they're up to 50 metropolitan areas now, the list is on their website. When you leave these areas, you will go back to slow 2G data speeds. If you wait and buy a new iPhone from T-Mobile this will not be an issue.

True, but only when you buy the iPhone 5 through T-Mobile. They will likely have to re-certify the phone through the FCC to get the AWS WCDMA/UMTS approval. AT&T put in its RFPs that phones it sells must have Band 4 (AWS) WCDMA/UMTS disabled in firmware (how convenient, then it wont work on T-Mobile).

You wont be able to take a current AT&T iPhone 5 and move to T-Mobile's network.

Do you have link that describes more about what is going on here? Is there a way to verify that this band has been disabled on an AT&T iphone?

I have to applaud ATT here. Their grandfathering of unlimited data makes them look all the more brilliant as companies like TM pull off plans like this and the new plans.

Even with the iPhone being officially supported on TM, I have too many fears (Vis VM, coverage, etc) to take my 3GS with me and leave ATT. If I leave and something goes wrong, my unlimited data (at 3-6GB/month) is gone forever. Hopefully this new announcement further solidifies and clarifies the iPhone relationship with TM, and an increase in subscribers can help ensure their continuing coverage expansion.

...It's going to be a rude awakening for some people, but they will hopefully understand arithmetic and see that they had been cheated by subsidized plans...

People will be able to more clearly see the difference, but I'm not sure that prices will go down just because the game is changing.

Carriers like to nickel and dime customers for every service they offer. When the subsidized plans go away, we will see increases in fees on the other services.

I fear this is what will happen with T-Mobile forcing the other carriers hands. They all had plans for growth and their budgets are expecting to be bloated with people paying on subsidized plans. They will not want to have their plans disrupted by lowering their income. So they will find other ways to get the same amount of profit from each customer as they currently make.

Data caps may be lowered or the price for the amount of data may go up.

Voice plans may come with less minutes.

Text Messaging plans may become limited.

T-Mobile needs customers and this is a great way to appeal to both Subsidized customers as well as people who typically would use a prepaid phone carrier. It's not guaranteed that other carriers will follow suit. If the other carriers do decide to get rid of or make less use of subsidized plans, then are we going to see them making up for those lost profits in other areas? I hope not, but it's hard to see a future were customers actually get to pay less. I'll remain cautiously optimistic regarding the affects of T-mobiles new plans on the cellular industry.

That.This is what happens in most of what we people outside US call as "World". If this model is indeed somehow adopted by other US carriers in future, I think there will be much more dramatic effects on the cellphone market than just subsidies and 2 yr plans...

KenG_CA wrote:

[...]maybe they won't upgrade as often as they do now. A more viable used market will appear[...]

The sales of high end smartphones may not show as gazillion growth as nowadays, Google's nexus model might see bright future, and I am not sure to call on this, but Apple may end up with the largest loss due to change. US is currently Apple's largest market and most of the iPhones are sold through contracts mostly because people get them for mere $200. Now, when they have to pay full price around $500-$600, we may know the results from Europe, China especially where cheaper phones do the zerg rush for 75% market share. Ah, the future!